SK Energy's First Advanced Catalytic Olefins Technology-Based Naphtha Cracker to Begin in October

---

Researched by Industrial Info Resources (Sugar Land, Texas)--The world's first naphtha cracker based on the patented Advanced Catalytic Olefins (ACO) technology developed by South Korean petrochemicals and refining major SK Energy (SEO:096775) (Seoul, South Korea) will begin operations in October this year. The company is building the 40,000-ton-per-year cracking facility at Ulsan, which is 345 kilometers from Seoul. The project is estimated to initially cost $25 million, and there are plans to expand the facility in the future.

The new ACO technology is considered superior to the traditional technique, as it consumes less heat and energy. The ACO process uses a catalyst that helps in conserving energy and heat by reducing temperatures to less than 700 degrees Celsius. The conventional process requires temperatures of about 1,000 degrees Celsius. The ACO process produces equal quantities of propylene and ethylene, and reduces carbon-dioxide emissions and energy consumption by 20% each. Traditional naphtha cracking processes primarily produce ethylene and a small quantity of propylene. Ethylene is used for the manufacture of vinyl products, while propylene finds use in the manufacturing of plastic containers and other items.

Sources have said that SK Energy's ACO process implementation comes at a time when the federal government announced more stringent legislation to reduce greenhouse gas emissions. In November last year, in its efforts to avert climate change, the South Korean government announced voluntary national emission targets.

In 2008, SK Energy developed the ACO process technology in association with the Korea Research Institute of Chemical Technology (KRICT) (Daejeon, South Korea). For the past eight decades, the naphtha cracking process has been performed using steam cracking or thermal cracking technology. The ACO process has several benefits, including flexibility of operations, economies of scale, and an increase of 15% to 25% in propylene and ethylene production in comparison to conventional processes.

In 2007, in an effort to make the ACO process technology available globally, SK Energy signed a technology marketing agreement with engineering and construction company KBR Incorporated (NYSE:KBR) (Houston, Texas). As part of the deal, KBR, formerly a subsidiary of energy major Halliburton Company (NYSE:HAL) (Houston), will develop, market, license and commercialize the ACO process. Experts have observed that the technology complements KBR's olefins process and the patented Orthoflow Fluidized Catalytic Converter technology. The agreement is expected to assist in a faster, and commercially viable, implementation of the technology. SK Energy is exploring opportunities to sign export agreements that will yield royalty payments of $20 million per plant.

SK Energy is a pioneer in South Korea's petrochemicals and refining industry. Established in 1962, the company built the country's first naphtha cracking facility in 1972. Presently, SK Energy operates the world's second-biggest single-site oil refinery and is the fourth-largest refiner globally. In the first quarter of this fiscal year, the increase in global oil product prices resulted in SK Energy's revenues growing by 26% to $8.16 billion. The petrochemicals business generated revenues of $2.54 billion, which was an increase of 23% and 76% from the previous quarter and the same period last year, respectively. During this period, the operating profit of this business grew by 147% and 18%, from the previous quarter and the same period last year, respectively. Presently, SK Energy, which operates refineries with a combined capacity of 1.12 million barrels per day, employs 5,500 people in 19 countries.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.